Correlation Between Malayan Banking and Mr D
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and Mr D at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Malayan Banking and Mr D into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malayan Banking Bhd and Mr D I, you can compare the effects of market volatilities on Malayan Banking and Mr D and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Malayan Banking with a short position of Mr D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and Mr D.
Diversification Opportunities for Malayan Banking and Mr D
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Malayan and 5296 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and Mr D I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr D I and Malayan Banking is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Malayan Banking Bhd are associated (or correlated) with Mr D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr D I has no effect on the direction of Malayan Banking i.e., Malayan Banking and Mr D go up and down completely randomly.
Pair Corralation between Malayan Banking and Mr D
Assuming the 90 days trading horizon Malayan Banking Bhd is expected to generate 0.31 times more return on investment than Mr D. However, Malayan Banking Bhd is 3.27 times less risky than Mr D. It trades about -0.13 of its potential returns per unit of risk. Mr D I is currently generating about -0.11 per unit of risk. If you would invest 1,066 in Malayan Banking Bhd on September 26, 2024 and sell it today you would lose (58.00) from holding Malayan Banking Bhd or give up 5.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Malayan Banking Bhd vs. Mr D I
Performance |
Timeline |
Malayan Banking Bhd |
Mr D I |
Malayan Banking and Mr D Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Malayan Banking and Mr D
The main advantage of trading using opposite Malayan Banking and Mr D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, Mr D can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mr D will offset losses from the drop in Mr D's long position.Malayan Banking vs. Public Bank Bhd | Malayan Banking vs. Hong Leong Bank | Malayan Banking vs. RHB Bank Bhd | Malayan Banking vs. Genetec Technology Bhd |
Mr D vs. Senheng New Retail | Mr D vs. Radiant Globaltech Bhd | Mr D vs. Genetec Technology Bhd | Mr D vs. FARM FRESH BERHAD |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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